Council approves $1.3 million upgrade for BPU

Wednesday

Aug 7, 2013 at 9:38 AM

By Matt Durrmdurr@hillsdale.net

HILLSDALE — The Hillsdale City Council voted Monday night to approve a $1.3 million Board of Public Utilities project.

The initiative will include the purchase of an Automated Metering Infrastructure. The BPU approved the scope of the project at its July meeting and submitted their plan for approval, which was unanimously accepted by council.

Copper Power Systems submitted the lowest bid and the city will be using the CPS metering system.

BPU Director Rick Rose said upgrading the method by which the city collects data is a sound and necessary decision.

"The Cooper Power System AMI project is an upgrade to our current Itron drive by radio collection system and offers us the next generation of software and hardware to keep the utility moving forward, doing more with fewer people," Rose said in a memo to City Manager Linda Brown. "The board looks at this as a large step in its overall strategic plan and further enhancements will be scheduled in the years ahead. This is a platform that we can build on to provide the residents with the best utilities service possible."

Rose said the current method of having a meter reader drive around town and collect all the data will be replaced with the AMI, which will allow for all the data to be collected in the BPU offices. He also said the new system will make BPU more efficient when dealing with power outages.

"We don't always get the best intelligence from our meters if we take lightning strikes at the power plant. This system will allow us to know exactly who is out, where they are at and what piece of equipment has basically opened up and where the issue is on the line," Rose said during the council meeting.

In his memo, Rose said he expects the new system to provide $34,000 a month in operational benefits and overall cost savings. Of the $34,000 a month, $18,378 will be used each month to pay for the cost of the $1.3 million project. The $18,378 payments will last for seven years according to the lease purchase agreement and an will be financed at a rate of 3.25 percent. Rose said the project will be installed in one year.

Council also approved a surcharge which will be added to monthly electric bills of up to $1 a month as part of the recently signed Senate Bill 284, now known as Public Act 9 of 2013.The law replaces the home heating assistance funding which was declared unconstitutional. The law allows for collecting and distributing $50,000,000 in annual low-income assistance to help residents in the state keep their electricity on between Nov. 15 and April 15.

The law allows for municipalities to opt out of the surcharge; however, they would not be allowed to shut off power at any residence between Nov. 15 and April 15. Rose acknowledged that the surcharge might not be met favorably by some in the city, but pointed out allowing for electric bills to go unpaid for five months would not be in the city's best interest.

"We're not doing people any favors by doing that," Rose said, adding that when the bills go unpaid for so long residents end up not being able to recover and the other residents in the city suffer due to higher costs and rates that result from the unpaid bills.

The surcharge is expected to begin appearing on electric bills in September.